All opinions expressed in this article are solely the opinions of the contributors.
In the United States, restaurant servers are paid below minimum wage and earn the majority of their incomes from tips left by customers. Even after accounting for these tips, a 2015 analysis concluded that the total median hourly income for a server in the U.S. was just $13, while bartenders earned only $9.
Former President Donald Trump recently suggested eliminating all taxes on server tips, which might alleviate some of the pressures these workers face. The price tag attached to that proposal, however, could add an additional $500 billion to the U.S. deficit over the next 10 years.
Watch the above video as Straight Arrow News contributor Newt Gingrich recalls a conversation between Donald Trump and a waitress where the waitress said he’d have her vote if he could just eliminate the taxes on tips. Gingrich explains why this actually might be a good idea to explore.
Be the first to know when Newt Gingrich publishes a new opinion every Wednesday! Download the Straight Arrow News app and enable push notifications today!
The following is an excerpt of the above video:
Second, I think that it’s a very powerful idea because it encourages people to work. I mean, one of the nice things about tipping is that if somebody does a really good job, you tip them a little bit more, they do a bad job, you don’t tip them at all. So it creates a sense of merit, that people have an incentive to pay attention to the customers. And I think that’s good, I think we should be encouraging that.
Third, by eliminating the tax on tips, you’re increasing the work incentive. And in fact, I think that’s a very important component. We’re getting ourselves out of the mess we’re in, in terms of food stamps, public housing, dependency, you know. It got so bad that in a referendum in San Francisco, over 60% of the city voted that you would have to take a drug test to get any kind of welfare or any kind of assistance. And that’s just because they’re fed up with people who sit around doing nothing, taking drugs, making the city uninhabitable, and then show up and expect you to take care of them.
Well, we had this parallel in requiring work when I was speaker. The Welfare Reform Act of 1996 required people to go to work or be studying. Similarly, what this will do is it will encourage people to work because they’ll get to keep the money. It will be a step away from a dependency welfare state back towards independence and the work ethic.
